[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Proposed Rules]
[Pages 30330-30331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11647]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-136020-07]
RIN 1545-BG96


Treatment of Property Used To Acquire Parent Stock in Certain 
Triangular Reorganizations Involving Foreign Corporations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations under 
section 367(b) of the Internal Revenue Code (Code) regarding certain 
triangular reorganizations. The regulations implement rules described 
in Notice 2006-85 and Notice 2007-48. The regulations primarily affect 
corporations engaged in certain triangular reorganizations involving 
one or more foreign corporations. The text of those regulations also 
serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by August 25, 2008.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-136020-07), room 
5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
136020-07), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically, via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-136020-07).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Daniel McCall, (202) 622-3860; concerning submissions of comments, 
requests for a public hearing, and/or to be placed on the building 
access list to attend a hearing, contact Richard Hurst 
([email protected]) or (202) 622-7180 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to section 367(b) of the Code and certain triangular 
reorganizations. The text of those regulations also serves as the text 
of these proposed regulations. The preamble to the temporary 
regulations explains the temporary regulations and the proposed 
regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required.
    It is hereby certified that these regulations will not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, a regulatory flexibility analysis is not required. This 
certification is based on the fact that the regulations will primarily 
affect large multi-national corporations that engage in triangular 
reorganizations subject to the regulations. The regulations apply to 
triangular reorganizations, involving one or more foreign corporations, 
to the extent that, in connection with the reorganization, the 
acquiring corporation purchases, in exchange for property, all or a 
portion of the stock used to acquire the stock or assets of the target 
corporation. Therefore, the IRS and Treasury Department expect only a 
de minimis number of small business entities to be subject to the 
regulations. Pursuant to section 7805(f) of the Code, this regulation 
has been submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. The IRS and Treasury Department request comments on the 
clarity of the proposed rules and how they can be made easier to 
understand. All comments will be available for public inspection and 
copying. A public hearing will be scheduled if requested in writing by 
any person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of these proposed regulations is Daniel McCall 
of the Office of Associate Chief Counsel (International). However, 
other personnel from the IRS and the Treasury Department participated 
in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 is amended by adding 
new entries in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.367(a)-3(b)(2)(i)(C) also issued under 26 U.S.C. 
367(a) and (b). * * *
    Section 1.367(b)-14 also issued under 26 U.S.C. 367(b). * * *

    Par. 2. Section 1.367(a)-3 is amended by adding new paragraph 
(b)(2)(i)(C) to read as follows:


Sec.  1.367(a)-3  Treatment of transfers of stock or securities to 
foreign corporations.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (C) [The text of this proposed amendment to Sec.  1.367(a)-
3(b)(2)(i)(C) is the same as the text of Sec.  1.367(a)-3T(b)(2)(i)(C) 
published elsewhere in this issue of the Federal Register].
* * * * *
    Par. 3. Section 1.367(b)-14 is added to read as follows:

[[Page 30331]]

Sec.  1.367(b)-14  Acquisition of parent stock for property in 
triangular reorganizations.

    [The text of proposed Sec.  1.367(b)-14 is the same as the text of 
Sec.  1.367(b)-14T(a) through (e)(5) published elsewhere in this issue 
of the Federal Register.]

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
 [FR Doc. E8-11647 Filed 5-23-08; 8:45 am]
BILLING CODE 4830-01-P